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September 15, 2009

California Leaders Back Health Program for the Poor

Dismayed by the number of poor children about to be dropped from a publicly subsidized health insurance program, California lawmakers voted Thursday to levy a tax on insurance companies to help maintain the program, which had been slashed into near nonexistence as part of the state’s budget.

The remarkable last-minute deal — in which Democrats wrote the bill’s language and the Schwarzenegger administration leaned on health insurance companies to accept it — may well presage efforts by other states to involve the health insurance companies in efforts to insure people as Congress hotly debates similar measures at the federal level.

The program, Healthy Families, which insures roughly 700,000 children of needy parents who earn too much to receive Medicaid coverage, had been almost eliminated this summer through $175 million in reductions made by lawmakers and Gov. Arnold Schwarzenegger. Grappling with large budget deficits, the governor and his fellow Republicans in the state legislature adamantly opposed new levies of any sort to salvage state programs.

But in a rare moment of bipartisanship budgeting, Republicans and Democrats together passed the bill by the required two-thirds majority: on Wednesday the State Senate voted in favor of the measure, 27 to 8, and on Thursday, the Assembly voted 58 to 0. The new legislation replaces an existing tax on insurers that was about to sunset with a smaller levy, one that will ultimately be reimbursed to the insurers through a mix of Medicaid matching money and federal stimulus monies.

“In this particular situation, I didn’t see this as a tax increase,” said Dave Cox, a Republican state senator who helped push for passage. Mr. Cox was one of several Republican lawmakers who criticized tax increases during the summer budget battles.

“To have 600,000 or 700,000 kids walking around without coverage would have been a disaster,” he said. “It was just the right thing to do.”

Since mid-July, the insurance program had been closed to all new enrollment, and had accrued a waiting list of 71,000. Currently $196 million in the hole, the program was set to drop about 600,000 children in November.

Under the new law, which Mr. Schwarzenegger has pledged to sign, health insurance companies that participate in the state’s Medicaid program will face a 2.35 percent tax on gross revenues, replacing the 5.5 percent existing tax that will end in October.

August 19, 2009

House Democrats Investigating Health Insurer Pay and Profits

Aug. 19 (Bloomberg) -- U.S. House Democrats asked the nation’s biggest insurers to provide details on executive pay, spending on retreats and entertainment, and other financial records as part of an examination of industry practices.

House Energy and Commerce Committee Chairman Henry Waxman and Representative Bart Stupak, chairman of the panel’s oversight committee, sent a letter dated Aug. 17 to dozens of health-insurance companies, including Blue Shield of California.

The letter asks the companies to name all employees who were paid more than $500,000 in a single year between 2003 and 2008 and to itemize their pay, including bonuses, stock options, perquisites and deferred compensation.

The panel is investigating “executive compensation and other business practices in the health insurance industry,” Waxman and Stupak wrote in the letter. The lawmakers asked the insurers to provide most of the pay information by Sept. 4, and the other data by Sept. 14.

Waxman, of California, and Stupak, of Pennsylvania, are among a team of House Democrats trying to beat back criticism of legislation to redraw the nation’s medical-care system. House Speaker Nancy Pelosi, a California Democrat, has complained about the insurance industry’s “immoral” profits.

The letter asked the companies to explain how they determined what to pay executives and provide documentation used by their boards’ compensation committees. It also seeks information about corporate events held off company grounds since Jan. 1, 2007, including how much was spent on transportation, entertainment, gifts and food.

The lawmakers asked the companies how much they earn through programs such as Medicare Advantage, which allows private insurers to deliver federally funded benefits. They called on the companies to provide data on profits from the individual insurance market and insurance provided through employers.

The Obama administration has proposed financing its overhaul of the nation’s health-care system in part by cutting federal subsidies to insurers participating in the Medicare Advantage program by $175 billion over the next 10 years.

August 06, 2009

Dr. Obama’s secret cure

The explosive battle over national health-care reform is wildly emotional, the issues are madly complex, and the expectations are impossibly high.

As 7 million uninsured Californians face east to pray for basic medical coverage from the high priest of change, President Barack Obama and his populist administration face a nearly hopeless task: Get concessions from historically—and stubbornly—self-interested stakeholders.

Just ask Hillary Clinton, whose own reform efforts in the early ’90s met with a blunt death blow at the hands of conservatives equating “reform” with “complete government control.” Clinton herself did not help matters by sequestering herself with a handful of brilliant minds and delivering her secret proposal on the steps of Congress, arms folded: health-care reform as fait accompli.

But there may be hope. Not just the hope Obama brings with his stunning worldwide popularity, grassroots support and Democratic Congress. And not just the hope gained from Clinton’s lessons of reform meltdown.

No, Barack Obama has a secret weapon right here in California that may help him claim ultimate victory: our state’s own failed reform effort.

Although the state’s health-care effort flamed out just a year and a half ago—hammered at a Senate Health Committee by a 7-1 vote in bipartisan opposition—it remains one of the nation’s most successful stabs at reform.

The story of Gov. Arnold Schwarzenegger’s grand vision of universal care is packed with devastating illness, seething passion, fretful hand-wringing and vicious table pounding. It features every interest group imaginable, each with its own angle, agenda and ideology. Like a Hollywood thriller, the stories intertwine, good guys turn sour, and even the best intensions are suspect.

Most important, it serves as the best road map so far to guide Washington over the bumpy, dirty boulevard of health-care reform.

“A lot can be learned by those in Washington, D.C., on how the Schwarzenegger administration conducted the negotiations and discussions,” said Jot Condie, president and CEO of the California Restaurant Association. “Whatever happens in California from a major public-policy standpoint usually rolls eastward.”

“Some important momentum happened in California to get beyond the usual stakeholders,” agreed Daniel Zingale, a health-care policy veteran from the administrations of President Bill Clinton and Govs. Gray Davis and Schwarzenegger. On the national stage, “the stakeholders are not lining up as usual.”